Regarding (a), from what I've read, Cryptsy hasn't said that their DASH were stolen. So there is high probability that Cryptsy itself sold the DASH to pay out BTC and LTC withdrawals, creating an "oversold" market situation.

IIRC the Bitcoins and Litecoins that were supposedly stolen, didn't move after the "theft" or theft. They were just directed in some addresses and they were stationary there for all this time. So if DASH was stolen and sold, then it would break the pattern of the thief. If he wanted BTC, he already had them, so... no need to sell DASH to get BTC. Therefore, if we accept the theft story etc etc, it makes more sense for cryptsy to have sold the coins and this is consistent with 1) what cryptsy said 2) the state of BTC/LTC funds that were supposedly "static" after the theft versus DASH which was gradually dumped.

Actually I expect that in such a scenario most exchanges will not have dual trading but will rather use an event like that as an opportunity to confiscate BTCs as their own and replace them with BTCCs. Especially if they have political reasons of siding with BTCC. So you either find a reliable dual exchange that has both BTC and BTCC (which may be hard to find or even DDOSed), or you move with alts as a vehicle of +1 step.

Let's hope we never find out.

No I'm not worried the least about satoshi moving his coins. He's not here to daytrade etc. I'm just saying how it could go down between BTC < alts > BTCC with alts as a vehicle, without even needing to pass through $$$.

I have a theory but it's just that: a theory.

I've been thinking about post-fork situations. Let's say a classic fork succeeds and there are large btc holders who do NOT want to dump BTCClassics for fiat, in order to buy more BTCs (core). In that case the only "avenue" to avoid fiat regulations is through altcoins: BTCC => altcoin => BTC.

Altcoins can serve as an effective dumping mechanism. Even a guy like satoshi could dump his 1mn coin stash in BTCC by buying 5-10 alts, and then buying BTCs. With fiat he would have to pass through some type of verification though.

This kind of demand, in such a scenario, would lead to explosive alt prices - even for a while, so being positioned in alts might pay off. On the other hand it could be some major whales feeling the need to diversify a bit. But that wouldn't drive prices up like that. This is pump'ish.

We've seen a price move from 0.005-6 to 0.017 with plenty of volume. It's not that flatlined... ~3x.

That's 33.447 transactions too many.

Practically, except those who overshot the fees at the bottom of the chart, everything included are cheap txs. There is nothing expensive at sub-10cents (not that 10 cents are expensive). The 14% is just ultra-cheap / near zero cost and most of the rest are slightly above ultra cheap.

If you have an average of even 30 satoshi per byte, then 1megabyte will cost ~0.3btc, a gigabyte 300 btc and a terabyte 300k BTC.

That's just 120mn USD for fucking up the blockchain / bloating it 15x upwards, while the marketcap is valued at several billions With half the fees (15 satoshi), it goes to 60mn usd for a 1TB attack. With larger blocks it becomes much easier and faster to accomplish if miners don't start cutting the trash off.

With "cheap storage" like this, even a third party enterprise can come aboard and say I'll use the Bitcoin blockchain for distributed storage of 50-100-200 GB for the X or Y application where I'll be using modified clients to pull out the data. And yeah, I'm willing to pay your peanuts in fees to do that, why not.


10, 20, 40, 60 s/B, are all peanuts - not serious fees. 1c, 2c, 5c, 7c it's all way too cheap.

But if you can get away with abusing the network with the lowest possible cost, why not.

Only they can answer it.

If the miners choose to mine everything, obviously there is a bypass to that.

Implementation is part devs - of any coin, not just btc - (they write the code, set the default values etc for nodes) and part miners & nodes who can change the values or disregard default recommendations. Same for wallets. I can disregard recommendation / default and send a free tx and hope it gets processed. Give it enough time and some times it does.

Who decided what the existing minimum fees are? Greenspan?

The average is problematic because there are some guys who are paying A LOT of fees without actually needing to pay them:

https://bitcoinfees.21.co/

Anything above 50 satoshis/byte right now is overkill, yet some are paying >100 satoshi/byte which distort the average, while a lot of txs are in the 0, 1-10 and 11-20 satoshi/byte categories.

I'm more concerned about 0 and 1-10.

10 satoshi x 250 bytes = 2500 satoshi for a normal tx = 1 cent.

Yeah, I say fuck them. Some countries even stopped minting 1 cent coins altogether due to the coin metal and minting costing more than 1 cent

It's about game theory and economic disincentives in order to defend against system(+atic) abuse. If you read the Ethereum link provided above, you'll see some subtle criticism against bitcoin for leaving the abuse disincentives (fees) to be ...determined by the free market. Litecoin also didn't leave the abuse prevention fees to be determined by the free market: The imposed a fee patch. Monero also saw first hand the effects of a bloat attack and raised fees.

As you can understand this is not about me.

If you made a coin tomorrow, and someone started killing it for the lolz, you'd patch it up with some kind of fee increase / block restriction. Common sense.

We definitely had some good pumps... from the 0.001x levels to 0.025-8 from April to May '14, then it crashed, post-Mintpal I think, in something like 0.003, then it went back up to something like 0.01, then it trended lower, then with the rebrand it hit 0.025+ and now, again, from 0.005 a couple of weeks ago to 0.017 a few days ago.

The network is in constant saturation by dust and spam that want to be processed for free or near zero cost. A stress test is just a more focused version of the same issue.


It is a problem but we also face political pressure. You can get crucified for doing the right fee with populist bullshit like "ohhh the devs are raising the fees, they want to make BTC expensive for users" crap.

Ethereum, which is hot these days, says, you know Bitcoin is kind of ...idealistic in its approach, we'll just use fees to prevent abuse:

https://github.com/ethereum/wiki/wiki/White-Paper#fees

"Because every transaction published into the blockchain imposes on the network the cost of needing to download and verify it, there is a need for some regulatory mechanism, typically involving transaction fees, to prevent abuse."


Free or nearly free txs = free or nearly free abuse. If you allow that = you are a joke coin that can be attacked by script-kiddies.

In BTC the last line of defense, in absence of serious fees requirement, is the block size.

When you have scaling issues you can't allow abuse like that. Some people are like, who cares, let's make the blockchain a few TBs, make the limit as large as it gets, we can afford hard disks... and we don't even need to run full nodes, we'll all use SPV. Yet, even BTC "competitors" (supposing someone doesn't want to listen to arguments by "core" or "classic") say there is centralization danger when you bloat the blockchain:

https://github.com/ethereum/wiki/wiki/White-Paper#scalability

"Scalability

One common concern about Ethereum is the issue of scalability. Like Bitcoin, Ethereum suffers from the flaw that every transaction needs to be processed by every node in the network. With Bitcoin, the size of the current blockchain rests at about 15 GB, growing by about 1 MB per hour. If the Bitcoin network were to process Visa's 2000 transactions per second, it would grow by 1 MB per three seconds (1 GB per hour, 8 TB per year). Ethereum is likely to suffer a similar growth pattern, worsened by the fact that there will be many applications on top of the Ethereum blockchain instead of just a currency as is the case with Bitcoin, but ameliorated by the fact that Ethereum full nodes need to store just the state instead of the entire blockchain history.

The problem with such a large blockchain size is centralization risk. If the blockchain size increases to, say, 100 TB, then the likely scenario would be that only a very small number of large businesses would run full nodes, with all regular users using light SPV nodes. In such a situation, there arises the potential concern that the full nodes could band together and all agree to cheat in some profitable fashion (eg. change the block reward, give themselves BTC). Light nodes would have no way of detecting this immediately. Of course, at least one honest full node would likely exist, and after a few hours information about the fraud would trickle out through channels like Reddit, but at that point it would be too late: it would be up to the ordinary users to organize an effort to blacklist the given blocks, a massive and likely infeasible coordination problem on a similar scale as that of pulling off a successful 51% attack."


Now note that Ethereum is soaring these days despite "fees" and "more scaling issues" due to all the apps that will be running on top of it. The market says it's the "next big thing". Or that it's a pump & dump. We'll see.



There's also the BTC price increase factor.

Subsidy of 25 BTCs at 500$ is the same as subsidy of 12.5 BTCs at 1000$.

The first miners mining 50 BTCs were getting paid much less (in usd) than the current miners at 25 BTC. Likewise for fees. ~0.3 BTC in fees today are, let's say ~120-130$, when it used to be ...nothing (in usd terms), even when people were using 0.01 for a fee.

I was thinking that an ideal way to eliminate spam would be for the miners/nodes to agree to not process txs that use a fee lower than 10 cents. We'd probably go down to 200-600kb blocks right away (depending the load) with plenty of room to spare - and probably everything would go in in the first block. But having prices in USD doesn't work in terms of code (which deals with BTC fractions).

You don't need to be a libertarian.

Remember that the number of people who like their national currency to be devalued and devalued and devalued is a very small group. Bitcoin offers a deflationary store of value, like gold, but you can also pay with it directly and electronically all across the world.

People in western countries or rich countries do not understand the problem. However billions of people live in countries where simply holding fiat currency for, say, 3 years, will end up in a reduction of your wealth by something like 20-40%. And these countries will also try to make it hard for the citizens to obtain hard currency or gold, in order to reduce pressure to their respective national currencies.

Most governments will try to push electronic payments of their currency as a modern alternative to cash. Bitcoin and altcoins are for when you don't want the government to monitor your buying habits, who paid you, what you bought etc etc. So the more electronic currency push there is by governments, the stronger the need for non-government alternatives. Goes without saying that the government push will also try to prevent people from trading with cryptocurrency.

Have the reasons that satoshi imposed the quota become invalid over time? Has a solution been found that I'm unaware of? Or is it just because "we are approaching the limit"?

I have not yet seen a single cryptocurrency that hasn't resorted to dev intervention under circumstances of bloat/flood attack. Whether it is about fees or block size, something has to give in order to stop it or restrain it.

Near-zero to zero fee txs equals near-zero to zero fee attacks. Attacks which do not have serious economic disincentives betray a broken underlying game theory.

Let's hope, once we get to 2mb, miners will be more selective with the trash txs.

In the EU, farmers are often getting paid to destroy their production if it exceeds specified quotas. Whether it is milk, cotton, peaches or grapes => they'll end up in some landfill.

There are even subsidies to cut down trees, kill your animals etc.

https://en.wikipedia.org/wiki/Common_Agricultural_Policy


Production quotas and 'set-aside' payments were introduced in an effort to prevent overproduction of some foods (for example, milk, grain, wine) that attracted subsidies well in excess of market prices. The need to store and dispose of excess produce was wasteful of resources and brought the CAP into disrepute. A secondary market evolved, especially in the sale of milk quotas, while some farmers made imaginative use of 'set-aside', for example, setting aside land that was difficult to farm.

Bitcoin is not technically superior in its storage/bandwidth/scaling parameters compared to visa because decentralization introduces p2p, which in turn introduces suboptimal ways of doing things.

A centralized system needs to have 1-2-5 copies of the same tx history. A decentralized system forces thousands of people to have a copy of the ledger in order to work. All the crypto-related bloat is also increasing the required space. The cost of running a secure decentralized system is far higher and more inefficient yet it is still cheaper.


The cost to the customer is paid when it is added by the merchant on the final price.

Can you sell me a 1 dollar coin for 1$ through visa or paypal? I'll come and pick it up from your home.

Paypal will charge you 0.35$ plus 1-4% on the 1$. So in order to be able to sell me the dollar, you'll have to sell it to me for at least 1.40$ to break even. If you are selling 1$ for 1$, you'll go bankrupt pretty soon.

How is 0.04$ expensive for first block inclusion? And you still have the choice of paying in an hour with 1cent. It's so cheap that it is exploitable by third parties and attackers.


Where I live, they say they have "competition" between 3-4 mobile operators. They are a cartel but the government pretends not to notice anyway. Still an SMS is like 160 bytes, costs multiple times the cost of a bitcoin transaction and millions of SMSes are sent every day. On a global scale we'll lose count of how many are being sent. So all these people who are SMS'ing don't feel it is expensive, but they would feel that a money transfer with BTC is expensive at 4c for first block inclusion / 1-2c for a few blocks later, for a service that is very fast and which is way cheaper than all alternatives. Are we serious?

High? Are you high? Compared to any other alternative (banks, visa, mc, paypal, western union, swift) it's the lowest you can get. Even an sms will cost me 0.12 euro and if I send it globally it might cost me half a euro.

And remember 4c-8c fees (depending the load) are for first block inclusion. If you want to move money in an hour or so, you can do it for 1-2c.

Plus the blockchain can be used for storage reasons by third parties - outside of the original specification and satoshi's intention.

At market rates of 10 satoshi per byte means you can add

1mb for 40$
10mb for 400$
100mb for 4.000$
1gb for 40.000$
10gb for 400.000$
100gb for 4mn $
1TB for 40mn $

Well, if I were the big banks, I'd pay my IT department to make BTC blockchain unusable. I have a multitrillion dollar industry, what's a few million to kill btc?

Let's pay some trolls down there too to cheer for their own destruction and spread division while we are at it.